The bitcoin price careened below $11,000 after the Trump administration stunned the market by delaying new tariffs on China. | Source: REUTERS/Leah Millis/Shutterstock; Edited by CCN
The bitcoin price slid below the $11,000 mark for the first time in more than a week on Tuesday, as the flagship cryptocurrency’s burgeoning inverse correlation with the S&P 500 came back to bite investors.
Bitcoin Price Careens Below $11,000
Bitcoin had entered the day trading sideways in the low $11,000s, where it had more or less languished since the Saturday sell-off that followed BTC’s brief foray above $12,000 last week.
The dam broke around 10 am ET, and the bitcoin price cascaded below $11,000 to breach its lowest level since August 4.
As of 10:35 am ET, BTC/USD had fallen as low as $10,863 on Bitstamp. The leading cryptocurrency last traded at $10,909 for a 24-hour decline of 3.45%.
Notably, the bitcoin price’s steep decline was accompanied by a phenomenal rally on Wall Street. The Dow Jones Industrial Average surged 500 points (nearly 2%), the S&P 500 rose 1.84%, and the Nasdaq cleared the 8,000 level following a 2.32% bounce. The CBOE VIX, which measures implied market volatility, fell 15%.
Trump Admin Delays New China Tariffs, S&P 500 Surges
That incredible divergence shouldn’t be surprising.
As CCN reported, bitcoin has developed an inverse correlation with the S&P 500. When the stock market bellwether falls, bitcoin rises – and vice versa.
Crypto investors have cheered that inverse correlation as trade war volatility has sent major stock indices into a tailspin,